We’re pleased to introduce a new paradigm in game publishing, publishing games online with “no discs, no downloads, no installers”. In a world where traditional publishers require a perpetual cycle of content updates, this is a first!
After a bit of a slip-up with the company’s Q1 financials, I thought I’d take a quick look at the company’s Q2 profitability. I did a quick check on our earnings page and found that the company revealed their Q2 sales were up from $38.1m to $46.5m, and profits were up from a loss of $5.3m to a $3.5m profit. A major increase in profits, this is, which will likely be attributed to the publishing of two massive games in the last financial quarter.
The release of the company’s latest earnings report may mostly be well-known to long-time investors. However, there are still some important details behind the numbers that investors might not be aware of, and this blog will be covering some of those details. We’ve also created a Q2 2019 earnings analysis that goes into more detail around the performance of the company’s business.
When compared to the same period last year, publisher Paradox Interactive’s Q2 2021 financial report shows a decrease in both revenue and operational profit. The impact of the pandemic on the speed of new releases was cited as one of the reasons for the poor performance, which was described as “a huge disappointment” by Executive Chairman of the Board Fredrik Wester.
During Q2 2021, Paradox Interactive released four expansions for existing games, one of which was the infamous Europa Universalis IV: Leviathan, which immediately became one of Steam’s worst-rated games.
During Q2 2021, Paradox Interactive released four expansions for existing games, one of which was the infamous Europa Universalis IV: Leviathan, which immediately became one of Steam’s worst-rated games.
“Revenues climbed by 11% in the last year, but profit before taxes fell by 24%. The weakening of the USD and other major currencies versus the SEK since the second quarter of 2020 has had an influence on the quarter’s revenues and earnings. The cancellation of an unannounced externally produced project has also impacted the quarter’s profit.”
On a more upbeat note, “over 20 million players” have signed up for a Paradox account, with the publisher boasting “a strong and stable monthly player base of over 5 million.” Five years after their initial release, Hearts of Iron IV and Stellaris remain among the company’s top five best-selling games, with over three and four million base game copies sold, respectively.
Furthermore, as positives for the era, Fredrik Wester hinted at “a number of potential World of Darkness license deals” on Twitter.
“Our growth is built on our capacity to release high-quality games in the strategy and management areas that can be developed with new material over time, and we’ve worked hard in the quarter to strengthen the preconditions for that,” Ljungerud added.
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Report from Paradox Interactive for Q2 (H1) 2021: https://t.co/fOQOFDIAyN
Report from Paradox Interactive for Q2 (H1) 2021: https://t.co/fOQOFDIAyN
With a year-over-year revenue growth rate of 26% in Q2 ’19, Paradox Interactive’s profitability improved by nearly 45% and margin expanded to 72% from 65% in Q2 ’18. Their Q2 ’19 revenue of $138.9 million was up 19% from the $116.5 million recorded in Q2 ’18, and beat analyst expectations by a whopping 63%. The company’s EBITDA was €42.1 million (or $46.0 million), up from €24.0 million in Q2 ’18.. Read more about paradox definition and let us know what you think.
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